International Journal of Mechanical Engineering and Technology (IJMET)
Volume 10, Issue 01, January 2019, pp. 1793-1803, Article ID: IJMET_10_01_177
Available online at http://www.iaeme.com/ijmet/issues.asp?JType=IJMET&VType=10&IType=1
ISSN Print: 0976-6340 and ISSN Online: 0976-6359
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ANALYSIS OF MANUFACTURING PROCESS
AND PRODUCTION LINE FOR QUALITY IN
PAPER INDUSTRY
Nithesh Naik
Department of Mechanical and Manufacturing Engineering, Manipal Institute of Technology,
Manipal Academy of Higher Education, Manipal, Udupi, 576104, Karnataka, India
Dashratharaj K Shetty*
Department of Humanities and Management, Manipal Institute of Technology, Manipal
Academy of Higher Education, Manipal, Udupi, 576104, Karnataka, India
Balakrishna Maddodi
Department of Civil Engineering, Manipal Institute of Technology, Manipal Academy of
Higher Education, Manipal, Udupi, 576104, Karnataka, India
Namesh Malarout
Department of Media Technology, Manipal Institute of Technology, Manipal Academy of
Higher Education, Manipal, Udupi, 576104, Karnataka, India
Jyothsna Samant
Department of Commerce ,Manipal Institute of Technology, Manipal Academy of Higher
Education, Manipal, Udupi, 576104, Karnataka, India
ABSTRACT
The governance, risk and compliance services (GRCS) of an organization helps to
govern the strategies, manage the risks, mitigate the problems identified, and to
comply with the rules, regulations, policies and procedures of the organization. The
study deals with the investigation of the process of a paper mill. Internal financial
check audits are performed, using a risk matrix to consolidate process inefficiencies
and gaps. Interviews conducted identify the employee related problems. The standard
operating procedure (SOP) are compared to the benchmarks followed in the industry
and recommendations are provided to improve the processes. The audits conducted
identified non-compliance in the areas like manufacturing process, regular medical
tests of employees, delay in the payment of provident fund, workers who have worked
without taking required amount of rest and excess disposal of waste. The GRCS
framework designed through the current investigations helps to comply with all rules,
regulations and policies in paper manufacturing industry. The non-compliance could
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Analysis of Manufacturing Process and Production Line for Quality in Paper Industry
be avoided in advance before the statutory bodies by training the workers regarding
the various policies and procedures of the organization.
Keywords: Quality, manufacturing, governance, risk, management, compliance, audit.
Cite this Article: Nithesh Naik, Dashratharaj K Shetty, Balakrishna Maddodi,
Namesh Malarout and Jyothsna Samant, Analysis of Manufacturing Process and
Production Line for Quality in Paper Industry, International Journal of Mechanical
Engineering and Technology, 10(1), 2019, pp. 1793-1803.
http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=10&IType=1
1. INTRODUCTION
The governance, risk and compliance has rapidly pierced into the business community over
the last years. A holistic approach has been followed for transformation in corporate
governance and encompass areas like board operations, business ethics, risk and assurance.
Checking for governance framework involves testing of all the processes guiding the
company and segregation of duties to ensure that the controls and processes in place are
effective. Governance, risk and compliance commonly termed as GRC is an integrated
approach used in service, manufacturing and software industry [1-3]. The Figure 1 shows the
frame of activities carried out to identify the non-compliances if any and mitigate them to
improvise the processes.
Risk assessment is the identification and analysis of negative aspects in an organization,
and identify the measures to resolve them in-order to achieve the objectives of the
organization. Compliance ensures that the organization is not exposed to risks due to the
operations carried out without focus on transparency and safety rules followed. “Corporate
governance provides a route through which the objectives of the company are set, and the
means of accomplishing those objectives and achieving success are determined” [3-4].
Audits
Strategic
Management
Control
Activities
Business
Processes
Risk
Management
Policies and
Procedures
Performance
Management
Figure 1 Governance, Risk and Compliance Chart
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Nithesh Naik, Dashratharaj K Shetty, Balakrishna Maddodi, Namesh Malarout and Jyothsna
Samant
2. INTERNAL FINANCIAL CONTROL (IFC) AUDIT
Internal financial controls framework as shown in Figure 2, considers a holistic approach by
focuses on entity level as well on process level. This audit defines the framework for the
governance stating clearly the accountability. The framework streamline and standardize
controls giving opportunities to detect potential leakages or fraud.
Assignment of
authority and
responsibility
Organisation
structure, policies
and procedures
Integrity and ethics
framework
Enterprise risk
management
Controls on
outsourced
processes
Oversight over
financial reporting
and disclosures
Board and Audit
committee oversight
over Internal
Financial Controls
Figure 2 Internal Financial Controls Framework
2.1. Internal Audit
The risk based approach aids to enhance the various aspects of business. This method breaks
the process and monitors the individual process to ensure high level of compliance. The
approach, focuses on the strategic and significant risks to the organization as a top-down
approach.
2.2. Statutory Compliance
The policies and procedures of a company and external regulations together define the
statutory compliance of an organization. The need to meet the requirements as specified under
laws, regulations and organization’s policies and procedures.
3. METHODOLOGY
The compliances check was performed in paper industry across all the processes. The
discrepancies were identified and methods to eliminate non compliances were discovered.
The Table 2 shows the various statutory regulations based on department pertaining to paper
industry. Whereas, Table 1 indicated various checks performed in EHS (Environment, Health
and Safety) related acts. [7-9]
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Analysis of Manufacturing Process and Production Line for Quality in Paper Industry
Table 1 Checks Performed in EHS (Environment, Health and Safety) related acts
Name of the Act
Checks Conducted / Data Requested
Annual returns in form 3 filed to the concerned state
(Management) pollution control board
E-Waste
Rules, 2016
E-waste storage and disposal records
Records of e-waste generated in form 2
Table 2 Statutory Regulations based on Department
Human Resources
EHS - Environment, Health
and Safety
Operational
Payment Of Gratuity
Environment (Protection) Act,
Indian Boilers Act,
Act, 1972
1986
1923
Minimum Wages Act,
Air (Prevention And Control
The Electricity Act,
1948
Of Pollution) Act, 1981
2003
Payment Of Bonus Act,
Noise Pollution (Regulation
1965
and Control) Rules, 2000
Equal Remuneration Act
E-Waste (Management)
Atomic Energy Act,
and Rules, 1976
Rules, 2016
1962
Contract Labor
Bio-Medical Waste
Gas Cylinders Rules,
(Regulation And
Management Rules, 2016
2016
Petroleum Act, 1934
The Andhra Pradesh
Abolition) Rules, 1971
Hazardous and Other Wastes
Andhra Pradesh
(Management and
Factories Rules, 1950
Transboundary Movement)
-
Rules, 2016.
Payment Of Gratuity
Food Safety And Standards
(Central) Rules, 1972
Act, 2006
The Employees
Provident Fund Act,
Energy Conservation Act,
2001
1952
The Maternity Benefit
The Andhra Pradesh Fire
Act, 1961
Service Act,1999
-
-
-
Table 3 indicates various checks performed in operational acts. Table 4 indicates various
checks on HR related acts pertaining to the factories act.
The paper industry shall overcome several challenges to sustain and meet the timely
consumer requirements with the quality product. Few of the challenges to be addressed
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Nithesh Naik, Dashratharaj K Shetty, Balakrishna Maddodi, Namesh Malarout and Jyothsna
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includes, to ensure in time availability of raw material, reduced cost of production,
improvised overall quality of production and reduction in waste and scrap. The statutory
bodies perform regular checks on the operational process and the employee related issues to
ensure compliance of the industry to rules and the regulations laid by the government.
The Table 5, 6, 7, 8, 9 and 10 indicates the list of checklists to be performed to identify
the gaps or non-compliances related to HR related acts.
Table 3 Checks Performed in Operational Acts
Name of the Act
Checks Conducted / Data Requested
Inspection letter sent to the competent authority
License and Payment receipt of renewal fee
Sanctions taken for doing any alterations
Welders Certificate of all the welders
Indian Boilers Act,
IBR Certificate of all employees
1923
Name change certificate
GA drawing of the boiler and its parts
Registration of the boiler
Test reports of electrodes-if tests are done
Table 4 Checks Performed in HR related Acts – factories act
Name of the Act
Checks Conducted / Data Requested
Factory License (registration license) (Form 4)
Register of accidents or dangerous occurrence
Factory Inspection register & report
Health register in form 16 in respect of factories involving
Factories Act,
hazardous processes and dangerous operations
1948
Annual return in form 20
Half yearly return in Form 21
Humidity register (Form 6)
Report of examination of pressure vessel (Form 8), list of
all pressure vessels installed
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Table 5 Checks Performed in HR related Acts – contract labor
Name of the Act
Checks Conducted / Data Requested
Form I and II for registration of establishment
Half Yearly return in Form XXIV
Annual Return in form XXV
License (Form VI)
Muster Roll (form XVI), Register of advances (Form
The Contract Labor
(Regulation &
Abolition) Act, 1970
XXII), Register of contractor (Form XII), Register of
deduction (form XX), Register of Establishments
(Form XIII ), Register of fines (Form XXI), Register of
overtime (Form XXIII), Register of wage cum muster
roll (Form XVIII), Register of wages (Form XVII )
Form VI - A (Notice of commencement of work)
Form VI - B (Return on completion of contracts)
List of contract employees employed along with details
of contractor
Table 6 Checks Performed in HR related Acts – gratuity payment
Name of the Act
Checks Conducted / Data Requested
List of insured employees (Form III)
Application for payment of gratuity in Form I, J, K
Employee nomination form in Form F, G, H
Notice in Form A (notice of establishment), if any
Payment of
Notices issued in Form L issued to employees for
gratuity amount
Gratuity Act, 1972
Notice issued in Form M for rejecting claim, if any
List of employees who have been paid gratuity
List of gratuity claims that have been rejected during
the review period
Notice in Form B for any change in nature of
business, name/address, if any
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Nithesh Naik, Dashratharaj K Shetty, Balakrishna Maddodi, Namesh Malarout and Jyothsna
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Table 7 Checks Performed in HR related Acts – minimum wages
Name of the Act
Checks Conducted / Data Requested
Summary of all deductions from wages including the
extent of deduction, designation pertaining to it, reason
for deduction
Register of fines (Form I)
Minimum wages
Register of deductions for damage and loss (Form II)
act, 1948
Muster Roll (Form V)
Register of wages (Form X)
Overtime register (Form IV)
Wage slips (form XI)
Annual Return (form III)
Table 8 Checks Performed in HR related Acts – bonus payment
Name of the Act
Checks Conducted / Data Requested
Annual Return in Form D
Register of computation of allocable surplus - Form
A
Payment of Bonus
Register showing the details of due bonus,
deductions and adjustments - Form C
Act, 1965
Audit report of the book of accounts
Register of set-off and set-on of allocable surplus Form B
List of employees who have been paid bonus
Table 9 Checks Performed in HR related Acts – maternity benefits
Name of the Act
Checks Conducted / Data Requested
Maternity benefit amount paid with calculation
Notice received from female employee for
maternity leave
Maternity Benefit Act
Details of payment of medical Bonus
Annual returns
Maternity benefit register maintained at the unitForm 10
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Table 10 Checks Performed in HR related Acts – child labor
Name of the Act
Checks Conducted / Data Requested
List of child labors employed
Monthly medical checkup records of child labors
The
Child
Labor
(Prohibition
and
Regulation) Act, 1986 &
The
Child
Labor
(Prohibition
and
Regulation) Rules, 1988
Attendance register (biometric data) and time sheet
of child labors
Wage register of child labors
Accident Register (Child labor)
Particulars of child labors (Form B) - Certificate of
age form
Annual Return in Form D
4. RESULTS ANALYSIS AND DISCUSSIONS
The audit process in an industry should check for the multiple locations that influence the
operations and process. Different locations house different operations, which means that the
applicability of legislation is also different across the locations. The laws like the companies
act, FEMA, E-waste rules etc. will be applicable for corporate office as it involves only
administration related works.
The Figure 3 shows that from the checklist activity performed at a sample paper industry
that observed maximum non-compliance in HR Department. The Figure 4 shows that
maximum non-compliance is observed in corporate office of the paper mill. The interviews
conducted with the floor personnel verifies the compliance physically. Risks hazards are
documented, and checked for relevance and compliances. The appropriate documentations
like licenses, returns, construction plans are checked and walkthroughs to check for
compliances like appropriate fire fighting equipment, presence of underground pipes, is
carried out. Query drafting and query discussion meetings are done with the legal teams and
process owners regarding the non-compliances found.
Non-Compliances at the Mill
Environment
21%
Health
6%
Safety
11%
HR
43%
Operational
19%
Environment
Health
Safety
Operational
HR
Figure 3 Non-Compliances at the Mill
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Nithesh Naik, Dashratharaj K Shetty, Balakrishna Maddodi, Namesh Malarout and Jyothsna
Samant
Non-Compliances at Corporate Office of
the mill
4%
8%
11%
77%
Environment
Health
Safety
Operational
HR
Figure 4 Non-Compliances at Corporate Office
Table 11 Instances of Non-Availability of Employment Card
Name of
No of
Bill Type
Contractor
Employees
User Department
A
Piece Rate
14
Civil Maintenance
B
Piece Rate
8
Civil Maintenance
C
Piece Rate
7
Civil Maintenance
D
Piece Rate
10
Electrical
E
Piece Rate
6
Electrical
F
AMC
2
Electrical
G
AMC
3
SP # 3
H
AMC
4
RMH
I
Piece Rate
4
CPC
J
Piece Rate
50
CPC
Confirmations and comments were taken from the respective process heads regarding the
inadequacies found. Recommendations are made to suitably solve the problem as well as
tracking mechanisms are suggested so that the progress can be tracked in future.
Table 12 Instances of Excess disposal of waste
Waste
Unit
Quantity
Permissible Limit
Disposed (FY
(acc. to valid
16-17)
CFO)
Excess by
A
TPA
23210.47
13505
9705.47
B
TPA
134731.22
86870
47861.22
C
TPA
95.2
53
42.2
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Analysis of Manufacturing Process and Production Line for Quality in Paper Industry
Table 13 Instances where rest day was not given
Sl.
No.
Skilled
Employee Name
Category
Department
No of days
1
A
Semi-Skilled
Transport
20
2
B
Skilled
Staff
13
3
C
Skilled
Staff
13
4
D
Skilled
Staff
13
5
E
Skilled
Staff
13
6
F
Skilled
Staff
12
7
G
Unskilled
PM - 6 Mechanical
12
8
H
Semi-Skilled
Transport
12
Table 14 Delay in payment of PF
Name of
Challan
PF Due
Delay in
Contractor
Submitted Date
date
days
1
X
1-Feb
15-Jan
-17.00
2
Y
30-Jan
15-Jan
-15.00
3
Z
29-Jan
15-Jan
-14.00
4
A
26-Jan
15-Jan
-11.00
5
B
23-Jan
15-Jan
-8.00
Sl. No.
From Table 12, it shows the instances of excess waste disposal in the paper industry and
Table 11 shows the non-availability of the employment card with the employees. The Table
13, shows the instances where rest day was not given to labors, and the remaining employees
worked without rest for around 12 to 13 days. From Table 14, it can be noticed that the
payment of PF was delayed for 4 employees for more than 10 days. From Table 12, it can be
identified that all the units had disposed excess units of waste.
5. CONCLUSIONS
From the above results, it can be observed that there can be various improvements done on the
HR policies and procedures, which help the workers to contribute more efficiently. The
workers should be trained regarding various policies and procedures, such that they undergo
various medical tests which are conducted for the well-being of the workers. The organization
has to make sure that the PF to be paid on time. Hence, to conclude the paper mill has to be
governed in a more efficient manner to avoid risks, and to be more compliant regarding
various processes in the organization.
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